Microsoft Pushes Back Against Proposed Bitcoin Treasury Allocation

Microsoft is instructing shareholders to vote against a proposal to invest a portion of the company’s assets into Bitcoin.

An Oct. 24 Microsoft Corporation filing submitted to the U.S. Securities and Exchange Commission outlined the items scheduled for voting at the company’s annual shareholder meeting on Dec. 10.

The items include a proposal from the National Center for Public Policy Research (NCPPR), a conservative think tank, calling on Microsoft to assess whether to invest company assets into Bitcoin.

NCPPR asserted that Bitcoin may offer the best hedge against inflation available to firms, stating that companies should hold at least 1% of their assets as BTC. NCPPR also noted that Bitcoin outperformed corporate bonds by 94% over the past year on average, and by 411% over the past five years.

“As of March 31, 2024, Microsoft Corporation has $484 billion in total assets, the plurality of which are US government securities and corporate bonds that barely outpace inflation,” NCPPR said. “In inflationary times like these, corporations should – and perhaps have a fiduciary duty to – consider diversifying their balance sheets with assets that appreciate more than bonds, even if those assets are more volatile short-term.”

However, Microsoft said the vote is not needed because its management has already evaluated Bitcoin and other cryptocurrencies as possible investments. The company concluded that the asset class is too volatile at present.

“As the proposal itself notes, volatility is a factor to consider in evaluating cryptocurrency investments for corporate treasury applications that require stable and predictable investments to ensure liquidity and operational funding,” Microsoft said. “Microsoft has strong and appropriate processes in place to manage and diversify its corporate treasury for the long-term benefit of shareholders and this requested public assessment is unwarranted.

According to CoinGlass, more than 60 companies currently hold Bitcoin on their balance sheets.

Microsoft also opposed calls for it to produce reports looking into the risks of weapons development, AI and machine learning in the context of oil and gas production, AI misinformation, AI data sourcing accountability, and data operations in human rights hotspots.